India's spectrum auction concludes early amid low demand

The spectrum auction in India wrapped up within a few hours on the second day, with telecom giants Reliance Jio, Bharti Airtel, and Vodafone Idea (VIL) purchasing over ₹11,300 crore worth of radio waves.

This amount represents a mere 12 percent of the ₹96,238 crore minimum value estimated by the government for the available spectrum.

The auction, which offered a total of 10 GHz of spectrum across bands ranging from 800 MHz to 26 GHz, saw total bids amounting to ₹11,340 crore, according to sources familiar with the proceedings. Approximately 140-150 MHz of spectrum was sold across seven bidding rounds.

On the first day of the auction, June 25, five rounds of bidding took place, but the second day saw minimal activity, leading officials to declare the auction's conclusion by 11:30 AM.

This year's auction, held after a nearly two-year hiatus, included spectrum in the 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz bands. As anticipated, the auction was low-key, with telecom companies focusing primarily on spectrum renewals and selectively enhancing their coverage.

The detailed breakdown of operator-wise bids will be revealed in an official announcement. However, the Department of Telecom's day-one report indicated that bidding was concentrated in the 900 MHz and 1800 MHz bands, with some bids for the 2100 MHz band in three circles.

In the previous auction held in 2022, which lasted seven days, a record ₹1.5 lakh crore worth of 5G spectrum was sold. Mukesh Ambani's Jio emerged as the top bidder, securing nearly half of the airwaves for ₹88,078 crore, while Bharti Airtel bid ₹43,084 crore and Vodafone Idea spent ₹18,799 crore.

For the current auction, Bharti Airtel and Vodafone Idea are renewing the spectrum in six and two circles, respectively. The low earnest money deposit (EMD) submissions by telcos prior to the auction indicated a selective approach towards the available spectrum.

Analysts predict that Bharti Airtel will focus on renewing its expiring spectrum, while Jio, with sufficient spectrum across 4G and 5G bands, will be selective. Jio is estimated to have spent ₹1,000 crore on spectrum in the 1800 MHz bands in a few circles.

For the 2024 auction, the EMDs submitted by telcos ranged from ₹300 crore to ₹3,000 crore, the lowest since 2014 and 80 percent lower than the previous auction in 2022. Reliance Jio submitted the highest EMD of ₹3,000 crore, followed by Bharti Airtel with ₹1,050 crore, and Vodafone Idea with ₹300 crore.

The Cellular Operators Association of India, which includes Reliance Jio, Bharti Airtel, and Vodafone Idea, stated that the auctions would accelerate the rollout of 5G services across the country, leading to improved coverage and connectivity.